B-126164, I-19346, JANUARY 31, 1957, 36 COMP. GEN. 540

B-126164, I-19346, JANUARY 31, 1957, 36 COMP. GEN. 540

PROCUREMENT - LUMBER - GRADE MARKING AND CERTIFICATION BY PRIVATE INSPECTION ASSOCIATIONS THE REQUIREMENT IN LUMBER PROCUREMENT INVITATIONS FOR GRADE MARKING OR CERTIFICATION BY PRIVATE INSPECTION OR GRADING ASSOCIATIONS, BUREAUS OR AGENCIES, ACCEPTABLE TO THE GOVERNMENT, IS NOT RESTRICTIVE OF COMPETITION NOR LEGALLY OBJECTIONABLE PROVIDING THAT THE GRADE MARKED OR CERTIFIED LUMBER IS SUBJECT TO FINAL INSPECTION AND ACCEPTANCE BY GOVERNMENT AGENTS AND THE REQUIREMENT IS ADMINISTRATIVELY DETERMINED TO BE IN THE BEST INTERESTS OF THE GOVERNMENT.

SOUTHERN WHOLESALE LUMBER ASSOCIATION, JANUARY 31, 1957:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 28, 1955, PROTESTING THE REQUIREMENT IN INVITATIONS TO BID NOS. ENG-09-026-56 110, ENG-09-026- 56-102, AND ENG-09-026-56-113 THAT PROCUREMENT ORDERS ISSUED UNDER CONTRACTS TO BE AWARDED PURSUANT TO THOSE INVITATIONS INCLUDE A STIPULATION THAT EACH PIECE OF LUMBER BE GRADE MARKED, OR THAT EACH SHIPMENT BE ACCOMPANIED BY A CERTIFICATE OF INSPECTION, BY A REPRESENTATIVE OF THE APPROPRIATE ASSOCIATION OR BUREAU OR A PRIVATE INSPECTION AGENCY ACCEPTABLE TO THE GOVERNMENT.

IT IS STATED IN SUPPORT OF THE PROTEST THAT THE CURRENT INSPECTION PROCEDURE OF THE CORPS OF ENGINEERS, AS TO PURCHASES FOR THE ARMY, IS TO ALLOW PRELIMINARY INSPECTION BY GOVERNMENT INSPECTORS AT POINT OF ORIGIN AS AN ALTERNATIVE TO THE GRADE MARKING REQUIREMENT REFERRED TO ABOVE. IS CLAIMED THAT, SHOULD THE GRADE MARKING REQUIREMENTS ORIGINALLY INCORPORATED IN THE INVITATIONS REFERRED TO BE SUBSTITUTED IN ALL CASES FOR THE PROCEDURE NOW BEING FOLLOWED BY THE CORPS OF ENGINEERS, MANY WHOLESALE LUMBER DEALERS AND MANUFACTURERS WHO ARE NOT MEMBERS OF A GRADING ASSOCIATION OR BUREAU WILL BE BARRED FROM BIDDING ON GOVERNMENT PROCUREMENTS.

IN LETTER OF JANUARY 31, 1956, TO MR. COURTNEY PACE, ADMINISTRATIVE ASSISTANT TO SENATOR JAMES O. EASTLAND, YOU STATED THAT IN THAT MONTH THE CORPS OF ENGINEERS REQUESTED BIDS PRELIMINARY TO THE AWARD OF "A CONSIDERABLE NUMBER OF CONTRACTS FOR LUMBER FOR USE BY THE DEPARTMENT OF THE NAVY" AND THAT THE INVITATIONS TO BID WERE WIDELY CIRCULATED THROUGHOUT THE LUMBER PRODUCING AREA. IT IS CLAIMED THAT PROSPECTIVE BIDDERS WERE ADVISED THAT AWARDS WOULD BE MADE TO THE LOWEST BIDDERS PRESENT AT WHAT WAS KNOWN AS A LUMBER " AUCTION" TO BE HELD IN ATLANTA, GEORGIA. THE PROTESTING ASSOCIATION STATED THAT THOSE REGISTERING AT THIS " AUCTION" AND POSTING BONDS INCLUDED 61 MEMBERS OF THE SOUTHERN PINE INSPECTION BUREAU, 5 MANUFACTURERS WHO WERE NOT MEMBERS OF THAT BUREAU, AND 41 WHOLESALE LUMBER DEALERS. IT IS STATED FURTHER THAT ON THIS OCCASION 95 NAVY CONTRACTS WERE AWARDED TO MEMBERS OF THAT BUREAU, AND 41 WHOLESALE LUMBER DEALERS. IT IS STATED FURTHER THAT ON THIS OCCASION 95 NAVY CONTRACTS WERE AWARDED TO MEMBERS OF THE BUREAU, 5 CONTRACTS WERE AWARDED TO NONMEMBERS, AND APPROXIMATELY 40 CONTRACTS WERE AWARDED TO WHOLESALE LUMBER DEALERS. YOU CONTEND THAT THESE FACTS CONSTITUTE EVIDENCE THAT GRADE MARKING REQUIREMENTS ARE ELIMINATING COMPETITION, CITING IN THIS CONNECTION THE ALLEGED FACT THAT ONLY 66 MANUFACTURERS PLACED BIDS FOR THE CONTRACTS OUT "OF A TOTAL OF APPROXIMATELY 1,650 POTENTIAL SUPPLIERS OF GOVERNMENT LUMBER" AND THAT NUMEROUS OTHERS REFUSED TO BID BECAUSE THEY WERE NOT MEMBERS OF THE INSPECTION BUREAU.

A REPORT ON YOUR COMPLAINT HAS BEEN RECEIVED FROM THE DEPARTMENT OF THE ARMY, WHICH SHOWS THAT THE CORPS OF ENGINEERS IS THE LUMBER PURCHASING AGENCY FOR ALL AGENCIES WITHIN THE DEPARTMENT OF DEFENSE; THAT THE FIRST TWO INVITATIONS MENTIONED IN THE LETTER OF PROTEST WERE BASED UPON PURCHASE REQUESTS ISSUED BY THE DEPARTMENT OF THE NAVY; AND THAT THE THIRD INVITATION WAS BASED UPON A PURCHASE REQUEST ISSUED BY THE DEPARTMENT OF THE AIR FORCE. IT IS REPORTED THAT ORIGINALLY ALL THREE PURCHASE REQUESTS CALLED FOR GRADE MARKED LUMBER, BUT THAT ON DECEMBER 8, 1955, THE DEPARTMENT OF THE AIR FORCE WITHDREW ITS MANDATORY REQUIREMENT FOR THE GRADE MARKED LUMBER AND THE INVITATION WAS AMENDED ACCORDINGLY. THE FIRST TWO INVITATIONS WERE NOT SO AMENDED, AND IT IS UNDERSTOOD THAT PROCUREMENTS ON THE BASIS OF REQUIRING GRADE MARKED LUMBER HAVE BEEN CONSISTENTLY AND UNIFORMLY REQUIRED BY THE NAVY FOR MANY YEARS.

IT APPEARS TO BE THE VIEW OF THE CORPS OF ENGINEERS THAT GRADE MARKING IS A FORM OF QUALITY CONTROL, BUT DOES NOT ELIMINATE FINAL INSPECTION BY GOVERNMENT OFFICERS AND THAT GRADE MARKING OF LUMBER DOES NOT GUARANTEE THE QUALITY OF THE LUMBER, BUT MAY RENDER THE FINAL INSPECTION OF GRADE MARKED LUMBER BY GOVERNMENT PERSONNEL LESS DIFFICULT THAN IT WOULD BE IN THE CASE OF LUMBER WHICH HAS NOT BEEN GRADE MARKED.

ONE GROUND OF YOUR PROTEST IS THAT THE COST OF GRADE MARKING AND INSPECTION SERVICES OF THE DESIGNATED ORGANIZATIONS, PARTICULARLY THE SOUTHERN PINE INSPECTION BUREAU, ARE NOT THE SAME FOR MEMBER AND NONMEMBER MILLS, IT BEING POINTED OUT THAT MEMBER MILLS PAY DUES TO THE BUREAU AT THE RATE OF 9 CENTS PER THOUSAND BOARD FEET OF PRODUCTION EACH MONTH, WHEREAS THE NONMEMBER MILLS PAY ON AN INDIVIDUAL SHIPMENT BASIS $1.25 PER THOUSAND BOARD FEET FOR 2-INCH LUMBER AND $1.50 PER THOUSAND BOARD FEET FOR ONE-INCH LUMBER, WITH A MINIMUM OF $30 PER DAY. IN CONNECTION IT IS TO BE NOTED THAT THE CHARGE TO NONMEMBERS COVERS ALL THE EXPENSES OF INSPECTION, WHEREAS THE NINE-CENT RATE PAID BY MEMBERS IS MORE IN THE NATURE OF A ROYALTY PAYMENT, THE ACTUAL INSPECTION AND MARKING BEING PERFORMED BY INSPECTORS APPROVED BY THE BUREAU BUT EMPLOYED BY THE MILLS AT THEIR OWN EXPENSE. IT IS, OUR UNDERSTANDING THAT GRADE MARKED LUMBER IS AVAILABLE IN EVERY SOFTWOOD LUMBER PRODUCING AREA IN THE UNITED STATES; THAT MEMBERSHIP IN THE BUREAU IS OPEN TO ANY MANUFACTURER OR MILL HAVING THE EQUIPMENT NECESSARY TO PRODUCE FINISHED LUMBER; AND THAT ANY NONMEMBER MILL IN ANY SUCH AREA MAY HAVE INDIVIDUAL SHIPMENTS GRADE MARKED AND CERTIFICATED BY APPLYING TO THE APPROPRIATE ASSOCIATION OR RELATED INSPECTION BUREAU FOR THIS SERVICE. SUCH SERVICES ARE AVAILABLE ALSO TO WHOLESALE LUMBER DEALERS ON THE SAME BASIS.

IN VIEW OF CONFLICTING STATEMENTS AND OPINIONS EXPRESSED REGARDING THE PROPRIETY OF THE USE OF GRADE MARK SPECIFICATIONS, AN INDEPENDENT INVESTIGATION WAS MADE BY REPRESENTATIVES OF OUR OFFICE TO ESTABLISH, IF POSSIBLE, WHETHER GRADE MARK SERVICES OF REGIONAL ASSOCIATIONS, BUREAUS, OR SPECIALLY APPROVED COMMERCIAL INSPECTION SERVICES ARE READILY AVAILABLE TO NONMEMBERS OF SUCH ASSOCIATIONS OR BUREAUS AT RATES WHICH PERMIT COMPETITION BETWEEN MEMBERS AND NONMEMBERS, AND WHETHER THE GRADE MARKING REQUIREMENT ADVERSELY AFFECTS THE INTERESTS OF THE GOVERNMENT EITHER IN THE SUPPLYING OF ITS NEEDS FOR LUMBER OF THE MOST FAVORABLE TERMS, OR IN PRESERVING FREE AND OPEN COMPETITION.

OUR INVESTIGATORS HAVE REPORTED THAT THE GRADE MARKING ACTIVITIES OF THE SOUTHERN PINE ASSOCIATION ARE CONDUCTED BY THE SOUTHERN PINE INSPECTION BUREAU WHICH OPERATES AS A SEPARATE AND AUTONOMOUS ORGANIZATION UNDER A CONSENT DECREE ENTERED FEBRUARY 21, 1940, IN THE CASE OF THE UNITED STATES OF AMERICA V. SOUTHERN PINE ASSOCIATION ET AL., IN THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF LOUISIANA, NEW ORLEANS DIVISION. A SIGNED STATEMENT WAS OBTAINED FROM THE SECRETARY-1MANAGER OF THAT BUREAU WHICH CONTAINS THE STATEMENT THAT, CONSONANT WITH THE DECREE IN THE ABOVE CASE, INSPECTION SERVICES ARE AVAILABLE ON EQUAL TERMS TO ALL MANUFACTURERS OF SOUTHERN PINE LUMBER WITH NO DISTINCTION BETWEEN MEMBERS AND NONMEMBERS OF THE SOUTHERN PINE ASSOCIATION OR SUBSCRIBERS AND NONSUBSCRIBERS OF THE SOUTHERN PINE INSPECTION BUREAU, EXCEPT IN RESPECT TO THE RATES OF CHARGE WHICH ARE AS STATED ABOVE. WE HAVE BEEN ADVISED BY THE DEPARTMENT OF JUSTICE THAT NO COMPLAINTS HAVE EVER BEEN RECEIVED OF VIOLATIONS BY THE BUREAU OF THE PROVISIONS OF THE DECREE PROHIBITING DISCRIMINATION IN THE FURNISHING OF ITS SERVICES.

THE AVAILABILITY OF SOUTHERN PINE INSPECTION BUREAU SERVICES TO NONMEMBERS WAS DISCUSSED WITH 32 OPERATORS OF NONMEMBER MILLS DURING THE COURSE OF OUR INVESTIGATION. OF THESE 32 OPERATORS, 18 REPORTED THAT THE INSPECTION SERVICES ARE READILY AVAILABLE, ONE STATED THAT HE WAS NOT AT ALL TIMES ABLE TO OBTAIN A BUREAU INSPECTOR ON THE JOB AT THE TIME HE WANTED A SHIPMENT INSPECTED AND GRADE MARKED, AND 13 WERE NONCOMMITTAL. IT WAS FOUND HOWEVER, THAT 12 OF THE 13 DO NOT SHIP GRADE MARKED LUMBER AND FOR THAT REASON DO NOT UTILIZE THE SERVICES OF THE BUREAU AND THAT THE ONE OTHER OPERATOR HAD AT ONE TIME BEEN A SUBSCRIBER TO THE BUREAU BUT HAD LOST HIS GRADE MARKING LICENSE. A NUMBER OF WHOLESALERS ALSO WERE QUESTIONED ON THIS POINT BUT NONE OFFERED ANY CRITICISM OF THE USE OF GRADE MARKING RULES. IT WAS FOUND THAT 8 WHOLESALERS, INCLUDING 5 MEMBERS OF THE PROTESTING ASSOCIATION, ADMITTED THAT GRADE MARKING SERVICES ARE READILY AVAILABLE TO NONMEMBER MILLS.

THE QUESTION AS TO WHETHER SOUTHERN PINE INSPECTION BUREAU INSPECTORS AND GRADE MAKING SERVICES ARE AVAILABLE TO WHOLESALERS AT THEIR DISTRIBUTION YARDS RATHER THAN THROUGH MILL SOURCES WAS COVERED IN AN INTERVIEW WITH THE MANAGER OF A LARGE WHOLESALE LUMBER FIRM WHICH MAINTAINS A DISTRIBUTION YARD IN WASHINGTON, D. C. IT WAS ADMITTED BY HIM THAT HIS COMPANY CAN OBTAIN THE GRADE MARKING SERVICES OF THE SOUTHERN PINE INSPECTION BUREAU AT A COST OF $1.25 TO A $1.50 FOR EACH THOUSAND BOARD FEET. THIS POINT WAS ALSO COVERED IN A TELEPHONE CONVERSATION WITH A. M. CAMERANO, WASHINGTON REPRESENTATIVE OF THE SOUTHERN PINE ASSOCIATION, WHO STATED THAT THE SOUTHERN PINE INSPECTION BUREAU WOULD RENDER GRADE MARKING SERVICE TO A WHOLESALER AT HIS DISTRIBUTION YARD ON THE SAME TERMS SUCH SERVICES WOULD BE RENDERED TO A MEMBER OF THE SOUTHERN PINE INSPECTION BUREAU OR A NONMEMBER MANUFACTURER.

DURING THE COURSE OF THE INVESTIGATION 32 OPERATORS OF MILLS WHO WERE NOT SUBSCRIBERS OF THE SOUTHERN PINE INSPECTION BUREAU WERE QUESTIONED AS TO WHETHER THEY WERE PRECLUDED FROM COMPETING ON INVITATIONS CALLING FOR GRADE MARKED LUMBER TO BE FURNISHED THE GOVERNMENT. OF THESE 32 NONSUBSCRIBERS 11 DECLINED TO EXPRESS THEMSELVES ON THE QUESTION, STATING THAT THEY WERE NOT TOO MUCH CONCERNED WITH GRADE MARKING BECAUSE PRACTICALLY ALL THEIR PRODUCTION GOES TO COMMERCIAL BUYERS WHO DO NOT REQUIRE GRADE MARKED LUMBER. OF THE REMAINING 21 NONSUBSCRIBERS, 18 TOOK THE POSITION THAT THE GRADE MARKING REQUIREMENT IS NOT NECESSARILY RESTRICTIVE OF COMPETITION IN THAT IT DOES NOT PRECLUDE THEM FROM BIDDING ON INVITATIONS TO BID CONTAINING SUCH A REQUIREMENT. OF THE 3 WHO TOOK THE OPPOSITE POSITION, ONE CONSIDERED THE GRADE MARKING REQUIREMENT TO BE RESTRICTIVE BUT DECLINED TO ELABORATE. THE OTHER TWO CRITICIZED THE STRICT INTERPRETATION OF THE GRADING RULES BY SOUTHERN PINE INSPECTION BUREAU INSPECTORS. IT WAS FOUND THAT WHOLESALERS AS SUCH CANNOT BECOME SUBSCRIBERS OF THE BUREAU. OF THE 23 INTERVIEWED CONCERNING WHETHER THEY CONSIDER THE GRADE MARKING REQUIREMENT TO BE RESTRICTIVE 21 WERE LOCATED IN THE SOUTHERN PINE AREA AND 2 WERE LOCATED IN WASHINGTON, D.C. WHILE THE COMMENTS OF THESE 23 WHOLESALERS VARIED, NONE APPEARS TO HAVE TAKEN A DEFINITE POSITION THAT THE DIFFERENCE IN THE RATE AND METHOD OF COMPUTING THE COST OF GRADE MARKING TO MEMBERS AND NONMEMBERS OPERATED TO THE DISADVANTAGE OF NONMEMBERS.

WITH REFERENCE TO THE AVAILABILITY OF THE GRADE MARKING SERVICES OF THE SOUTHERN CYPRESS MANUFACTURERS ASSOCIATION, THE OFFICES OF THE ASSOCIATION WERE VISITED, ITS RECORDS EXAMINED AND ITS TWO PART-TIME INSPECTORS WERE INTERVIEWED. THESE EMPLOYEES STATED THAT THE ASSOCIATION'S GRADING RULES ARE STRICTLY ENFORCED INCIDENT TO INSPECTIONS PERFORMED FOR BOTH MEMBERS AND NONMEMBERS AND THAT NO PARTIALITY IS SHOWN TO MEMBERS IN ANY RESPECT. THIS APPEARS TO BE IN ACCORDANCE WITH THE GRADING RULES OF THE ASSOCIATION WHICH PROVIDE THAT THE SERVICES OF ITS INSPECTION DEPARTMENT ARE AVAILABLE TO MEMBERS AND NONMEMBERS ALIKE AND THAT " NO ADDITIONAL CHARGE WILL BE MADE FOR BOTH GRADE MARKING AND ISSUING CERTIFICATES.'

ALTHOUGH THE INVESTIGATION WAS LIMITED TO THE SOUTHERN PINE AREA, SOME INFORMATION WAS OBTAINED BY CORRESPONDENCE FROM OTHER MEMBER ASSOCIATIONS THROUGHOUT THE UNITED STATES CONCERNING THE AVAILABILITY OF GRADE MARKING SERVICES TO NONMEMBERS OF THESE ASSOCIATIONS. THE RESULT OF THESE SOLICITATIONS INDICATE THAT IN ALL CASES WHERE GRADE MARKING IS PRACTICED, IT IS MADE AVAILABLE TO NONMEMBERS AS WELL AS MEMBERS ALTHOUGH IN SOME INSTANCES NONMEMBERS ARE REQUIRED TO PAY A SLIGHTLY HIGHER FEE.

OUR INVESTIGATORS MADE AN EXTENSIVE REVIEW AND ANALYSIS OF THE RECORD AT THE SOUTH ATLANTIC DIVISION OF THE CORPS OF ENGINEERS IN CONNECTION WITH THE " AUCTION" REFERRED TO IN THE LETTER OF JANUARY 31, 1956, TO SENATOR EASTLAND, AND IT WAS FOUND THAT A TOTAL OF 109 SUPPLIERS REGISTERED FOR THE AUCTION. OF THESE, 45 WERE WHOLESALERS, 45 WERE MANUFACTURERS, 17 WERE WHOLESALER-MANUFACTURERS AND 2 WERE WHOLESALER-AFFILIATES. INCLUDED IN THE TOTAL OF THE 109 SUPPLIERS, 53 WERE MEMBERS OF GRADING ASSOCIATIONS (50 OF THE SOUTHERN PINE INSPECTION BUREAU AND 3 OF THE WESTERN PINE ASSOCIATION OR WEST COAST LUMBER INSPECTION BUREAU). TWENTY-ONE MEMBERS OF THE PROTESTING ASSOCIATION WERE PRESENT AT THE AUCTION. A TOTAL OF 183 NAVY CONTRACTS WERE AWARDED AT THE AUCTION AS FOLLOWS:

TABLE WHOLESALERS ------------------------------------------------- ---- 61 MANUFACTURERS:

SOUTHERN PINE INSPECTION BUREAU SUBSCRIBERS ---------------- 97

MEMBERS OF OTHER GRADING ASSOCIATIONS ------------------------- 10

NONMEMBERS ---------------------------------------------------- 15 WITH RESPECT TO THE STATEMENT IN THE LETTER OF JANUARY 31 THAT THERE WERE APPROXIMATELY 1,650 POTENTIAL SUPPLIERS IN THE SOUTHERN PINE AREA, THE LUMBERMEN'S RED BOOK LISTS 3,092 MANUFACTURERS, 1,053 WHOLESALERS AND 1,148 SAWMILLS IN THE 13 SOUTHERN AND BORDER STATES GENERALLY CONSIDERED TO BE IN THE SOUTHERN PINE AREA. NUMEROUS MILLS IN THIS AREA DO NOT SELL DIRECTLY TO CONSUMERS BUT DISPOSE OF THEIR LUMBER ONLY THROUGH WHOLESALERS. ONE WHOLESALER STATED THAT HE DEALS WITH APPROXIMATELY 100 MILLS AND ANOTHER STATED THAT HE PLACES ORDERS WITH ABOUT 380 MILLS. FAIL TO FIND ANY SATISFACTORY BASIS FOR DETERMINING THE NUMBER OF "POTENTIAL SUPPLIERS" WHO MIGHT BE QUALIFIED TO BID ON GOVERNMENT REQUIREMENTS. THE INFORMATION THUS OF RECORD HERE WOULD SEEM TO INDICATE CLEARLY THAT NO LUMBER DEALERS OR MANUFACTURERS GENERALLY, WHETHER MEMBERS OR NONMEMBERS OF A GRADING ASSOCIATION, ARE AT THE PRESENT TIME PRECLUDED FROM BIDDING ON LUMBER REQUIRED BY THE GOVERNMENT TO BE GRADE MARKED. FURTHERMORE, IT IS THE CONSIDERED OPINION OF THE DEPARTMENT OF THE NAVY AND OF SEVERAL OTHER INTERESTED GOVERNMENT AGENCIES THAT THE REQUIREMENT OPERATES AS A QUALITY CONTROL WHICH MATERIALLY REDOUNDS TO THE INTERESTS OF THE GOVERNMENT NOT ONLY THROUGH THE ELIMINATION OF RIGID GOVERNMENT INSPECTIONS AT CONTRACTOR'S PLANTS OR SHIPPING POINTS, BUT THROUGH THE GREATER ASSURANCE THAT THE LUMBER WILL BE OF THE STANDARD REQUIRED BY THE MANDATORY GRADING RULES OF THE ASSOCIATION. THE RESPONSIBILITY OF DETERMINING WHETHER LUMBER OFFERED TO THE GOVERNMENT IN FACT CONFORMS TO THE STANDARDS REQUIRED BY CONTRACT SPECIFICATIONS RESTS WITH THE GOVERNMENT PROCUREMENT OFFICIALS. SEE IN THIS CONNECTION 6 COMP. GEN. 140 WHEREIN IT WAS HELD THAT THERE WAS NO LEGAL AUTHORITY FOR THE EMPLOYMENT OF INSPECTORS AT GOVERNMENT EXPENSE TO MAKE INSPECTIONS THAT SHOULD BE MADE BY REGULAR GOVERNMENT EMPLOYEES. TO THE SAME EFFECT SEE 15 COMP. GEN. 1081; ALSO COMPARE 17 ID. 56; 19 ID. 941; 24 ID. 924; 31 ID. 510; 32 ID. 127. HOWEVER, THE NATURE OF THE INSPECTION INVOLVED IN THIS MATTER IS NOT OF THE SAME CLASS AS THAT TO WHICH OBJECTION WAS TAKEN IN THE DECISIONS CITED ABOVE, IN THAT THE INSPECTION HERE INVOLVED DOES NOT PURPORT TO CONSTITUTE A FINAL AND BINDING DETERMINATION ON WHICH PAYMENT OF APPROPRIATED MONEYS WILL BE MADE, ALL LUMBER FURNISHED BEING SUBJECT TO FINAL INSPECTION AND ACCEPTANCE BY GOVERNMENT AGENTS.

UNIFORM FEDERAL SPECIFICATIONS FOR LUMBER PURCHASED BY AGENCIES OF THE GOVERNMENT HAVE BEEN IN EFFECT IN ONE FORM OR ANOTHER SINCE THE CREATION OF THE FEDERAL SPECIFICATIONS BOARD IN 1921. THE SPECIFICATION OF GRADE MARKED LUMBER HAS BEEN AUTHORIZED BY THE FEDERAL SOFTWOOD LUMBER SPECIFICATION AT LEAST SINCE 1940, AND WE HAVE RECORD OF THE USE OF SUCH A REQUIREMENT AS FAR BACK AS 1927. AS NOTED ABOVE, THE DEPARTMENT OF THE NAVY (WHICH USES APPROXIMATELY ONE-FOURTH OF THE LUMBER PURCHASED BY ALL THE ARMED SERVICES) HAS CONSISTENTLY ADHERED TO THIS REQUIREMENT FOR AT LEAST TEN YEARS, AND IT IS UNDERSTOOD THAT IT IS PREFERRED BY SEVERAL OTHER AGENCIES. WE HAVE NO RECORD OF ANY PRIOR PROTEST TO OUR OFFICE CONCERNING THE USE OF THE GRADE MAKING REQUIREMENT, BUT WE DO FIND THAT A FORMER COMPTROLLER GENERAL ISSUED INSTRUCTIONS IN 1927 AND 1928 THAT NO QUESTION OR EXCEPTION NEED BE RAISED IN THE AUDIT OF ACCOUNTS BY REASON OF THE USE OF SUCH PROVISIONS IN GOVERNMENT CONTRACTS.

HAVING REGARD TO THE PRIMARY RESPONSIBILITY AND AUTHORITY OF THE OPERATING AGENCIES OF THE GOVERNMENT TO DETERMINE THE METHODS AND POLICIES TO BE FOLLOWED IN PROCURING THEIR NEEDS FOR SUPPLIES, AND TO THE LONG- CONTINUED USE OF THE GRADE MARKING REQUIREMENT, WITH THE SANCTION OF THE AGENCY CREATED TO UNIFY AND STANDARDIZE SPECIFICATIONS FOR GOVERNMENT PURCHASES, AND WITHOUT OBJECTIONS BY THE ACCOUNTING OFFICERS, WE FIND NO ADEQUATE BASIS IN THE PRESENT RECORD TO OBJECT TO THE PROPRIETY OF THE PRACTICE UNDER CONSIDERATION.

YOU ARE ACCORDINGLY ADVISED THAT WE PERCEIVE NO LEGAL OBJECTION TO THE REQUIREMENT THAT GRADE MARKED OR CERTIFICATED LUMBER BE FURNISHED UNDER CONTRACTS CALLING FOR SUCH LUMBER, IF IT BE FURNISHED SUBJECT TO FINAL INSPECTION AND ACCEPTANCE BY THE GOVERNMENT, AND IF IT BE ADMINISTRATIVELY DETERMINED THAT SUCH REQUIREMENT IS IN THE BEST INTEREST OF THE GOVERNMENT.